How To Manage Sustainability In Mining And Energy And Turn It Into A Strong Asset
Historically, few executives saw the connection between economic savings, efficient operations and a functioning sustainability plan. This is however starting to change.
Sustainability efforts were typically viewed by executives in the mining and energy industry as purely a box to be ticked, a line item requirement in order to appease NGO’s and local government in return for a license to operate. However, following the recent economic slump, a downturn in commodity prices and an increased pressure on industries in general to introduce more sustainable practices that support climate change action, executives are recognising the need to adapt. In these “mines of the future”, with new technological innovations such as automation, mechanisation and data analytics, sustainability is being proffered as the catalyst to implement these changes. A thoroughly implemented plan can positively impact all aspects of the mining value chain, from input sourcing and growth of local reserves and renewable energy to providing a sustainable product for market. In return, companies are seeing efficiencies in operations and greater economic viability.
A road map for managing sustainability
In a BCG report entitled (Sustainable Development Goals) Race, David Young and Wendy Woods muse that many companies are far from achieving the goals set out in the UN’s 2020 Agenda for Sustainable Development. “They continue to struggle on various fronts: in changing the way they work and organise, in developing the necessary capabilities, and in crafting suitably large development projects quickly enough,” the report laments. However, there are essential factors to be considered in managing sustainability. Implementing a strategy requires continuity, prioritisation and clarity on how to address challenges. In order for it be successful, it needs to be constructive, comprehensive and not conducted in isolation, while also ensuring that it is embedded in the culture of the company.
Firstly a plan's success is measured on how well it is supported by the upper echelons of a business. Input on execution and management from executives, stakeholders and board members should be integrated into the overall agenda and achievements of the company.
Vision and accountability needs to be filtered down to ground level. Creating a small team to carry out these initiatives, with the power to define roles and responsibilities, report on progress, share updates and make essential changes, helps weave sustainability into the fabric of the operation. By creating a clear structure and guideline to track and prioritise initiatives, it ensures that the plan for sustainability becomes part of the day to day operations. It in turn builds awareness, set examples employees can follow and nurtures the desired culture of change.
While achieving results from sustainability programs is not something that occurs over night, it is important to define success early in terms of focus. This can be achieved through setting Key Performance Indicators (KPIs) that are tangible and connected to specific operations. In particular, measurable aspects of the business such as output, profitability and other financial targets. Creating clear categories and definitions across all levels of the organisation works to ensure that sustainability remains at the forefront of the organisation’s agenda. Through monitoring and measuring progress at defined intervals the company can work to incentivise employees to get on board with their sustainability actions, understand the aims and witness the growth as they progress. Also ensuring to celebrate the small wins, when they occur.
Integrate sustainability into the development, planning and management of a mine, through establishing, for example, an agreed level of emissions and energy consumption across an operation or finding alternative methods to manage sustainability on a day to day basis. A mine in Mexico was a prime example of this achievement. Early on in the mine’s development an opportunity was pinpointed to substitute the use of diesel-fuelled trucks for a rope conveyor. The decision was taken to use the conveyor to haul ore down a steep mountain instead of through trucks. Not only did it decrease the diesel emissions but it significantly increased safety, lowered operational costs and produced energy that was redirected to power the plant.
Another key part of a sustainability plan is to invest in a range of sustainable resources, such as battery operated equipment. Or new technologies, many of which have reduced energy intensity and improved water and air cleaning functionalities.
Developing A Strong Asset Out Of Sustainability
Enabling green policies, while costly upfront, reveal many financial gains in the long run. For example, recycling and reducing waste has been linked to an improved bottom line. Some companies that are operating in remote locations are seeking renewable energy sources as an alternative power source rather than the cost prohibitive options of bringing diesel onsite or building separate power facilities. Last year, in Namibia, a company operating in the Otjikoto mine announced a plan to build a 7MW solar plant to power its operations. A prime example of successful sustainable development, not only will it decrease emissions and lower fuel costs, but it is improving relations with local communities by supplying the surrounding area with cost efficient power. Developing aligned relations with communities, local government and NGOs helps to create a more harmonious operation, which results in fewer delays and disruptions and costly disputes. “The mining industry is starting to take sustainability seriously, realising that if they don’t act on it, they won’t survive,” says Tom Melbye, an advisor on the digital and sustainability of the mining and energy industry. “After all, sustainability is increasingly connected to productivity, which is in turn linked to economics and profitability. So there are clear financial gains to be had from sustainability.”
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